Debt Snowball or Debt Avalanche: Which is Better?

If debt feels like it’s weighing you down, take a breath—you’re not the only one, and you can find a way forward. Many people in your shoes have found that using a clear strategy makes all the difference. Two of the most popular—the debt snowball and debt avalanche methods—can help when you’re seeking a structured plan and momentum as you work toward becoming debt-free.

The debt snowball and debt avalanche methods have different approaches, but both have the potential to get you to a debt-free life. Let’s dive into how they work, and which one might work better for you.

Debt Avalanche

The debt avalanche method is all about efficiency. It targets your debt with the highest interest rate first—usually a credit card—while keeping up the minimum payments on everything else. Any extra money you have goes toward that highest-interest debt. This approach saves you money by cutting down the total interest you pay over time.

Here’s how the debt avalanche method works:

1. List your debts from highest to lowest interest rate.

2. Throw any extra cash at the debt with the highest interest rate.

3. Pay the minimum on all the other debts.

4. Once the highest-interest debt is paid off, move to the next highest.

5. Add the payment from debt 1 to the minimum payment you were already making on debt 2.

6. Don’t reduce the total that you pay each month.

7. Repeat until you’re debt-free.

Think of the debt avalanche method as tackling the toughest challenge first—like an avalanche crashing down a mountain. It’s a smart, aggressive way to reduce your debt load fast. That said, it demands discipline, especially when cash is tight, since the payoff builds over time rather than showing quick wins. As you move toward paying off debts with lower interest rates, the extra cash you put toward it will gather momentum and you'll feel the results.

Example debt avalanche method

Say you have four debts: a student loan, two credit card balances, and a car loan. 

You currently pay minimum payments, and this month you have $50 extra to put toward debt. To execute the avalanche strategy, pay off the highest interest rates first, in the order shown below:

This month, you’d pay $1,535 total (minimum payments plus your extra $50 toward Credit Card A). 

Once Credit Card A is paid off, you take that $350 and add it to the payment you’re making on Credit Card B. Don’t pay less even if your credit card minimum payments go down as you chip away at the balances. You’ll start to notice the avalanche accumulate force, because your Credit Card B monthly payment is now $397—not $47. 

Once that second credit card is paid off, you take the entire $397 and add it to your $985 student loan payment. By the time you’re done paying off the first three debts, the car loan will already be paid off.

You’d pay off your debt in 90 months and spend $136,831. The debt avalanche would save more than $9,000 in interest costs, and pay off your debt years faster than making only the minimum payment.

When to use the debt avalanche

The debt avalanche could be a good strategy when you:

• Carry high-interest debt, like credit card or some unsecured personal loans

• Have high-interest credit card debt and large balances

• Have a history of making on-time, consistent payments

Say you have three equal debts, and the interest rate on the largest balance is twice as much as the smallest. By paying the highest-rate debt first, you could save thousands of dollars. The larger the interest-rate difference, the more powerful the debt avalanche becomes.

Imagine you owe:

If you can add $150 a month toward your debts on top of the minimum payments, here’s how the numbers play out and how much you’d pay:

• Snowball: $43,483.50 over 44 months

• Avalanche:$41,587.56 over 42 months

Why the debt avalanche can be challenging

The math makes sense for an avalanche. So why doesn’t everyone use it?

The biggest challenge in a debt payoff plan is sticking with it. It can take a while to pay down high-interest debts. It takes time for the momentum to build. Mentally, it can be challenging to feel you’re slowly chipping away without a clear win. 

Debt avalanche helps you pay down debt faster, but some people might find it harder to stay motivated. For those people, the debt snowball might be a better choice because it’s the fastest path to your first payoff.

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Debt Snowball

The debt snowball method could provide more immediate results. It starts with your smallest debt, regardless of interest rate, to give you a quick win that fuels your drive. Like a snowball rolling downhill, your payoff capacity grows as you bowl over debts one by one.

Here’s the debt snowball method in action:

1. List your debts from smallest to largest balance.

2. Put any extra funds toward the smallest debt (in addition to the minimum payment).

3. Make just the minimum payments on all the other debts.

4. After clearing the smallest debt, roll its payment into the next smallest debt, and keep going.

The debt snowball method works because it satisfies a very human craving for immediate gratification. Paying off smaller debts quickly boosts confidence and keeps you committed to crushing the rest.

Example: How the debt snowball method works

Say you have four debts: a student loan, two credit card loans, and a car loan. (These are the same numbers from the debt avalanche method—we’ve put a direct comparison in the following section.)

You currently make minimum payments, and you have $50 extra to put toward debt. To execute the snowball strategy, pay off the smallest balances first, in the order shown below:

You’d pay off your debts in 90 months, and spend $137,286 to eliminate your debt. 

The debt snowball would pay off these debts 31 months faster than making only minimum payments. Plus, you'd pay off your first debt within two years—building momentum that you can put toward paying off bigger debt. 

You’d pay off your debts in 90 months, and spend $137,286 to eliminate your debt. 

The debt snowball would pay off these debts years faster than making only minimum payments. Also, you'd pay off your first debt within two years—building momentum that you could put toward paying off bigger debt. In our debt avalanche above, it’s three years before the first debt is cleared.

In the snowball, after three years, if you stick with the snowball and keep on rolling those extra payments toward your remaining balances (and you don’t pay less as your credit card minimum payments go down), you’ll be paying $1,518 on your student loan—and you can enjoy watching the balance drop sharply with every payment. 

When to use the debt snowball

The debt snowball is a better strategy for most people. 

Debt snowball is powerful because it keeps you committed with continuous, tangible results. Say you have an extra $50 to put toward a debt. That extra money could mean you pay off Debt A in six months, the car loan in two years, or Debt B in five years. Which one would you choose? Mathematically, you might look at interest rates for the answer, paying the highest first, avalanche-style. 

Snowball would have you pay off Debt A, the smallest balance, for a psychological reason. By quickly paying off that first debt, you hit a target—and you free up more money that you could snowball into the next-smallest debt. Momentum is key when you work on a project that could take years to complete. Every milestone is proof that you’re someone who can pay their debts and accomplish hard things, easing your stress and boosting your confidence.

Debt Snowball Myths

There are some myths worth dispelling about debt snowball.

Myth: Debt snowball is inferior to debt avalanche

Debt snowball has powerful psychological benefits. Sure, it’s not as solid as debt avalanche mathematically. But while some struggle with numbers, many struggle with motivation. Snowball addresses the hidden motivation aspect.

Myth: Snowball ignores interest

The snowball method has you prioritize your smallest debt, but minimum payments are still being made on other debts. A portion of minimum payments goes toward paying down principal. You’re making progress on all your debts, including your high-interest debts.

Myth: Debt snowball is only for small debts

Snowball is great for small debts, but focusing on one debt at a time and building momentum is powerful at any money level. You could use it effectively for big debts.

What’s Faster, the Debt Snowball or the Debt Avalanche?

You might have noticed that both the snowball and avalanche methods could clear your four debts in 90 months. The final payment in the avalanche method would be $455 smaller.

It’s true that the avalanche method would save you money in interest charges by clearing the most expensive debts first. But it’s also true that in most cases, the avalanche method only helps you pay off your debt zero to one month faster than the snowball method. In some cases (like our example), it won’t save you any time at all.

The thrill of paying off a debt sooner might be more motivating than the hope of saving a few hundred dollars.

Which Debt Reduction Method Is Right For You—Debt Snowball or Debt Avalanche?

Both the debt snowball and the debt avalanche are solid ways to pay down your debt. Debt snowball may be the best way to reduce debt for many people. The upside—motivation—is massive, since many debtors struggle with motivation. And the downside—more interest payments—can sometimes be relatively insignificant, depending on your balances, interest rates, and situation.

Example debt payoff comparison

Let’s take the debt scenario used in the previous sections. You have the following four debts:

Your total debt is $101,500. To pay this off, you have three options: minimum payments, the debt snowball method, or the debt avalanche method.

Here’s what the results look like:

Using the avalanche or the snowball method could make you debt-free two and a half years sooner than just making minimum payments and save you $8,700 to $9,200. Both methods are superior to making minimum payments. 

Mathematically, an avalanche looks better, but there’s more to the story. The avalanche method might save you a few hundred dollars compared to the snowball, assuming you stick to the plan. That commitment to stay with the plan is the hardest part, something many people struggle with.

So, which DIY debt payoff strategy is better?

For many people, the debt snowball method is better—especially if they have several similarly sized balances. 

Sure, the numbers on our table show that you could, in theory, save $455 by choosing debt avalanche.

The table doesn’t measure motivation. By using the debt snowball method, you could be likely to actually stick to the plan. And carrying out your debt-payoff method is really the most important part. 

Read more: How to Get Rid of Debt Without Paying

When to switch between methods

You can combine the methods. For instance, you could start with a snowball for a quick win. When you find that it motivates you to keep paying off debt, you could switch to avalanche for the rest of your debts. Combining methods is sometimes called a debt blizzard.

Here’s how to start with one strategy and transition to another:

• Snowball to avalanche. Once you’ve gained momentum by paying off smaller balances, you may be more confident in switching to avalanche to maximize savings.

• Avalanche to snowball. If motivation fades and progress feels slow, pivoting to the snowball method could keep you moving forward.

The best method is the one you can stick with consistently. Debt reduction is a marathon, not a sprint, and consistency often matters more than perfect optimization.

Step-by-Step Implementation Guide

Now that you’ve picked a debt payment strategy, here’s what to do next:

1. List and organize debts.

2. Create a budget that includes extra payments.

3. Track progress.

4. Use behavioral science to stay motivated.

We’ll take you through each of these steps so you know exactly how to get the ball rolling.

1. List and organize debts

The first step is to collect your financial info in one place. 

For each debt, you’ll want:

• Lender/creditor name (e.g., Chase, Sallie Mae, personal loan from a relative)

• Current balance

• Interest rate (APR)

• Minimum monthly payment

You can organize this info on a spreadsheet, a debt-tracking app, or a notebook. Here’s what it might look like:

In this case, the debts are organized from biggest to smallest APR. If you use the avalanche, you’ll prioritize repaying debts from top to bottom, in order of interest rate. If you use the snowball, you’ll reorder these debts from smallest to largest balance.

Once you have everything together, you can put together a quick and easy budget.

2. Create a budget with extra payments

The goal of budgeting is to figure out where you could free up extra money to put toward your debt. 

To create a simple budget, use a spreadsheet,  budgeting app, or  notebook. The result might look like this:

Freeing up money from one area could shave months off how long it takes to pay down debt. What’s more, when you pay off Debt A, the money you used to make minimum payments for that debt can now go toward Debt B. Your payments snowball; you move faster and faster.

Now you know what money can go where. The next step is doing something that makes it easier to stay committed: tracking progress.

3. Track progress

Tracking how you’re doing keeps you motivated during the long stretches between debt payoffs. When you add milestones or just look at how far you’ve come, that can strengthen your commitment. It’s not just one more payment. You’re more than halfway to your goal. 

You can get creative. Ways to track progress include:

• Free printable debt trackers

• Debt jars filled with marbles or beans you remove as you pay off your debt

• Debt tracker apps

Some methods will probably resonate more than others. Choose the one that feels good to you, so you keep coming back. It’s a great way to reinforce commitment.

4. Use behavioral science to stay motivated

Use behavioral techniques created by experts on habits and engagement. The goal is to make paying off debt feel manageable, not painful. If each payment feels like a small win, you’re already on the path to success.

Ways to reinforce commitment:

• Accountability partner. Find a friend to team up with. You could hold each other accountable to a mission: to make this month’s debt payment. High-five each other when you hit targets or make payments.

• Milestone rewards. Set milestones, like every $1,000 paid. When you hit the milestone, find a fun, low-cost way to celebrate, like a movie night with popcorn at home, or lunch with a friend.

• Social reinforcement. Tell friends, accountability partners, and social networks when you hit big milestones. It’s worth being proud of, and positive feedback feels great.

• Streak calendar. Create a streak system—put a big X on a calendar for each month you pay. Missing a payment breaks the streak.

• Wealth freedom tracker. When you pay off a debt, add that number to your “wealth freedom” counter. You own it—this is wealth you’ll never have to spend on minimum payments.

Behavioral science techniques reinforce each other, becoming stronger when you use more than one. For example, go out to dinner with your accountability partner when you hit a milestone. Maybe you set aside time to do something you enjoy every time you build a three-month streak. 

The more motivated you are, the more consistent you’ll be, and the faster you’ll pay down debt.

Combining Debt Consolidation With Snowball or Avalanche

Debt consolidation combines multiple debts into a single new loan, possibly with a lower interest rate. Your monthly payments will be streamlined and may even be lower. You could take out a personal debt consolidation loan to cover multiple loans. Other options include using a credit card with an introductory 0% interest rate for a balance transfer or taking out a home equity loan.

Benefits of consolidation

It might be worth combining debt consolidation with the snowball or avalanche method. You could combine two or three debts to make your life easier.

The benefits of consolidating debt into a lower-interest loan are:

• Easier tracking

• Smaller monthly payments

• Save money on total interest charges

Also, consolidating credit card debt into a personal loan turns revolving credit into a fixed payment schedule. Fixed payments create obvious deadlines to hit. It’s motivating, and it might help you stick with debt payoff.

Once you consolidate debts, adjust your organized debt info to reflect your new consolidated debt, including the combined balance and new interest rate. You may discover your debt payoff strategy moves that consolidated debt up or down the priority list.

Pitfalls to watch for

Changing your loan structure doesn’t automatically change your usual habits. If you move the balances from two credit cards to a personal loan and keep swiping as usual, you could add more debt to your plate. To give your debt payoff every chance of success, be careful about using old cards, make all purchases in cash, or stick to budget caps.

Keep an eye on interest rates. Consolidating loans into one with a higher-interest rate might simplify payments, but it will probably make the debt more expensive and take longer to pay off. Ideally, you want a lower rate.

Clarify the fees in a new loan. Hidden fees include origination fees and balance transfer fees. An extended repayment period is similar to a fee. It might lower monthly payments, but it also increases how much money you’ll pay overall. It’s a tradeoff—be sure you’re comfortable making it.

When consolidation makes sense 

Consolidation makes the most sense when you:

• Have multiple high-interest debts. Especially credit card debt, where a consolidation loan could offer a lower interest rate.

• Your total debt is manageable. The amount you owe isn’t so overwhelming you’d need debt settlement or bankruptcy.

• Are having trouble keeping track of multiple payments.

• Have a good to excellent credit score. You can qualify for the best loans. You could still qualify with a lower credit score, but you might not get an interest rate low enough to make consolidating worthwhile.

Common Mistakes to Avoid

Let's cover some common debt payoff mistakes, and we’ll also look at how debt relief works..

Killed momentum

Like a boulder rolling downhill, debt payments gather speed and momentum. Skipping a couple of months slows the boulder’s roll, forcing you to put in extra effort to get it moving again.

You don’t need to think about your debt all the time. Instead, create a payment routine you can stick with, and trust the habit to move you forward. Each payment brings you closer to your goal, even if progress feels slow. It’s okay if life happens and you need to cut back on extra payments for a month. 

Unprepared for emergencies

Remember to budget for emergencies. The hardest hits are those you don’t see coming. An emergency fund could help you stick to your plan when your car needs new brakes, your dog needs surgery, or you lose your job.

New debt

New debts can be just as bad as the old ones. Be careful of taking on debt during debt payoff. Shuffling debt around might feel like progress, but debt is debt. Avoid using old cards, or cap spending. Old habits may be hard to break, but doing so could save your finances.

Find the Best Solution to Get Rid of Debt

Ready to tackle your debt? The debt snowball and debt avalanche methods are great places to start. But if managing debt solo feels overwhelming, Freedom Debt Relief can step in. Our Certified Debt Consultants can explore options like our debt relief program to guide you toward financial freedom. Curious if you qualify for Freedom Debt Relief’s program? Find out today.